NERL (NR23) Price Control Final Decision
CAP2597 sets out our Final Decision for the UK en route, London Approach and Oceanic price controls that will apply for the five calendar years from 1 January 2023 to 31 December 2027 (the NR23 period). It includes the modifications to NERL’s licence to implement the NR23 price controls.
- Economic Regulation of NATS (En Route) plc: Final Decision for the NR23 (2023 to 2027) price control review (CAP2597)
- Economic Regulation of NATS (En Route) plc: Final Decision for the NR23 (2023 to 2027) price control review (London Approach and Oceanic) (CAP2597a)
- Appendices A to D to Final Decision for the NR23 price control review (CAP2597b)
- Appendix E to Final Decision for the NR23 price control review – Final licence modifications (CAP2597c)
- Appendix F to Final Decision for the NR23 price control review - RAB Rules (CAP597d)
- Price Control Model (CAP2597e) (download spreadsheet)
- Price Control Model Guide (CAP2597f)
- CRCO Reporting Tables Nov-23 (CAP2597g)
- CRCO Additional Information Nov-23 (CAP2597h)
Reports by external consultants
NERL (NR23) Price Control Provisional Decisions
CAP2553 sets out our Provisional Decisions for the UK en route, London Approach and Oceanic price controls that will apply for the five calendar years from 1 January 2023 to 31 December 2027 (the NR23 period).
CAP2553 also sets out the statutory consultation on the proposed modifications to NERL’s licence to implement the NR23 price controls. It also contains our Decisions on non-NERL costs for the NR23 period.
- Economic Regulation of NATS (En Route) plc: Provisional Decisions for the NR23 (2023 to 2027) price control review (CAP2553)
- Economic regulation of NATS (En Route) plc: Provisional Decision for the NR23 (2023 to 2027) price control review (London Approach and Oceanic) (CAP2553a)
- NR23 Review: UK performance plan Decision on DfT, Met Office and CAA en route costs (2023 to 2027) (CAP2553b)
- Appendices A to G to Provisional Decisions for the NR23 price control review (CAP2553c)
- Appendix H to Provisional Decisions for the NR23 price control review – Proposed licence modifications (including corrigendum) (CAP 2553d)
- Appendix I to Provisional Decisions for the NR23 price control review – RAB Rules (CAP2553e)
- Price Control Model (CAP2553f)
- Price Control Model Guide (CAP2553g)
- Responses to stakeholder requests for clarification on NR23 Provisional Decision (CAP2553h)
- NR23 Provisional Decision working for the assumed cost of debt (download spreadsheet)
Reports by external consultants
- NR23 Updated Beta Assessment, Flint Global (April 2023)
- Analysis of pension costs for NATS (En Route) plc – Government Actuary Department (June 2023)
- Letter of comfort: Financial model assurance for the NERL price control NR23, Vercity (July 2023)
Responses
NERL (NR23) Price Control Initial Proposals
CAP2394 sets out for consultation our Initial Proposals for the UK en route, London Approach and Oceanic price controls that will apply for the five calendar years from 1 January 2023 to 31 December 2027 (the NR23 period).
- Economic regulation of NATS (En Route) plc: Initial Proposals for the next price control review (NR23)(CAP2394) (October 2022)
- Initial Proposals for the next price control review (NR23) – Other price controls (CAP2394a)
- Appendices A to G to initial proposals for the next price control review (NR23) (CAP2394b)
- Appendices H to J to initial proposals for the next price control review (NR23) (CAP2394c)
- CRCO reporting tables Oct-22 (CAP2394d)
- Appendix I Draft RAB rules (CAP2394e)
Reports by external consultants
- Analysis of pensions costs for NATS (En Route) Plc, Government Actuary’s Department (June 2022)
- Estimating NERL’s Beta at NR23, Flint Global (May 2022)
- NATS (En Route) PLC SIP – Independent Reviewer Report, Egis (September 2022)
- Review of NERL Capex Engagement Incentive, Egis (September 2022)
- Support on cost assessment for NR23 period and reconciliation review (2020-2022), Steer and Integra (October 2022)
- Tax review for NR23 IPs, Grant Thornton (October 2022)
- Traffic sensitivities technical note, Steer (October 2022)
Responses
NERL price controls review 2023 to 2027 (NR23)
In response to the CMA's final report on RP3 and the impact of COVID-19, we are reviewing NERL's regulatory arrangements. The review - NR23 - will take both a backward look at NERL's determination for RP3 in light of the impact of COVID-19, and establish new price controls for NERL's regulated activities for the period 2023 to 2027 inclusive. NR23 encompasses activities previously sometimes referred to as RP3 interim arrangements (RP3I).
Updated timetable for NR23 price control review
Following review of the NR23 timetable, we consider it is appropriate to delay the publication of the CAA’s Initial Proposals to provide sufficient time to consider material policy issues and to ensure further robust engagement with NERL and stakeholders. Details of the updated timetable are set out in the below letter.
Invitation to stakeholders - February 2022
On 7 February 2022, NERL published its business plan for the NR23 price control review. As noted during the customer engagement process in autumn 2021, we have invited stakeholder views on NERL’s business plan to help inform how we develop the CAA’s Initial Proposals.
- Updated letter to stakeholders inviting submissions of views on NERL’s NR23 Business Plan (1 March 2022)
- Letter to stakeholders inviting submission of views on NERL’s NR23 Business Plan (February 2022)
Stakeholders provided the following responses to the CAA:
- Air Canada
- Air France
- British Airways
- easyJet
- Emirates
- Gatwick Airport
- IATA
- Lufthansa
- Prospect
- Ryanair
- Virgin Atlantic
Update - December 2021
CAP2306 sets out our request for further information and detail in relation to the operating expenditure, capital expenditure and non-regulatory revenue building blocks to be included in NERL's NR23 business plan, which we expect to be submitted by 7 February 2022.
- Request for information to NERL for the NR23 business plan submission: cost and revenue building blocks (CAP2306) (December 2021)
- CAA letter to NERL: Template for NERL's building block update submission
- Building block template (Excel file)
- Opex template (Excel file)
Update - November 2021
The document covers the following topics:
- stakeholders' responses to the June 2021 Update (CAP2160), in relation to the 2020-2022 reconciliation review, and our views on these responses;
- in the appendix, the request for information to NERL, which provides a high-level overview of the information we require to carry out the reconciliation review; and
- a more detailed description of the evidence that is being sought from NERL as part of its submission for each building block.
Update - June 2021
CAP2160 provides further details in relation to the next NERL price control review (NR23), including:
- our current view on the timetable;
- guidance for NERL in developing its business plan and the customer engagement process with airspace users; and
- the reconciliation review for NERL's revenues for 2020 to 2022.
Responses to CAP2160
Update - August 2021
CAA letter to NERL: further guidance on the approach to the next price control review, NR23
Update - March 2021
- Economic regulation of NATS (En Route) plc: Update on approach to the next price control review (CAP2119) (March 2021)
Responses to CAP2119
Approach to next price control review - December 2020
- Economic regulation of NATS En Route plc: Consultation on the approach to the next price control review (CAP1994) (December 2020)
Responses to CAP1994
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